“We’re open for business. We are confidently expecting that now we’ve done this deal and we’ve shown that it’s possible that we will have other funds say this is a terrific initiative and want to come on board.”

The Australian Prudential Regulation Authority has been urging funds to consider merging to take advantage of scale benefits.

Both Equip and Catholic Super were quizzed by the banking royal commission about the breakdown of previous merger discussions. They were unable to come to separate agreements in part because of indecision over who would sit on the merged entity’s board.

But it has been agreed that Mr Fairley will chair the new 12-member trustee board and Catholic Super chairman Danny Casey will serve as his deputy.

Equip Super, founded in 1931 for Victorian electricity workers, is the only non-profit fund to have been granted an “extended public offer licence” by APRA.

The licence means Equip can be the trustee of multiple funds.

Equip Super and Catholic Super will effectively become divisions of the same fund. Members will still deal with whichever fund they joined.

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The funds have similar performance outcomes. Equip's growth option, as defined by Chant West, returned 6.8 per cent over five years and 7.6 over 15 years.

Catholic Super returned 7.9 per cent over five years and 7.8 per cent over 15 years.

Mr Casey said one of the traditional barriers to merging was the loss of "connectedness to community" by the subsumed fund.

“One of the things that attracted us to the whole arrangement is that we found a way to get the benefits of scale but maintain our identity,” he said.

“This is an exciting day for us but also provides a model for other funds to consider.”

The combined trustee board will begin operating from October 1.

A successor fund transfer will still need to occur and is scheduled to be completed a year or so later.

The board will be made up of four independents, four employer-nominated directors and four employee-nominated directors.

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“By using our extended public offer model, we are able to, on October 1, form a trustee board formed by a combination of Equip and Catholic Super directors,” Mr Fairley said.

“And that board will become the trustee of both Equip and Catholic Super. Over the following 12 or 14 months that board will harmonise both of those funds so that as at December 31, 2020, we will be able to complete the successor fund transfer.

“Even when we come together there will be within the fund a Catholic Super division and an Equip division.

“So at all times Catholic Super will be able to retain its branding for its members in the same way as Equip will be able to retain its branding for its members.”